Microsoft investigating extent of abuse in software sales system

Published 10:00 pm, Thursday, December 19, 2002

More Microsoft Corp. employees could be arrested for stealing and reselling the company's software, as could buyers of that stolen software.

An "ongoing investigation" is asking who at Microsoft besides Daniel Feussner -- a former manager charged last week with selling $9 million worth of stolen software -- may have abused a system called MS Market that lets employees get unlimited amounts of Microsoft software free, so long as it is used only for business purposes. No specific individuals at Microsoft have been identified, according to a source with knowledge of the investigation, but "based on the nature of the system, it's fair to say" people have probably abused it.

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As MS Market operated when Feussner was allegedly abusing it, all employee orders for Microsoft software are automatically approved and filled. An e-mail notifying the direct supervisor of the employee placing the order, if the software has a "cost of goods sold" value of less than $1,000.

None of the software that Feussner allegedly received and sold has a "cost of goods sold" more than $1,000, though some of it retails for as much as $20,000. The cost of goods sold is the cost to Microsoft of producing and shipping the product.

When items with a cost of goods sold of more than $1,000 are ordered, an e-mail is sent to the employee's direct supervisor, who must click on an "Approve" button before the order is filled.

Microsoft said the company has been working -- even before the Feussner incident -- to increase the security of the internal software-ordering system.

Company spokeswoman Stacy Drake said in a statement that Microsoft is also conducting "a number of investigations into potential wrongdoing which may result in termination of employment and criminal prosecution. The vast majority of Microsoft employees are honest, but we will not tolerate illegal and dishonest behavior."

The source said buyers of the stolen software could also be targeted, though no particular buyers have yet been identified.

Feussner, 32, is scheduled to appear in federal court today for a determination of whether his detention at the SeaTac federal detention center should be continued pending trial.

The government has 30 days, beginning tomorrow, to formally charge him. He has initially been charged with five counts each of wire fraud, mail fraud and computer fraud.